The proposed first indication for SCH 503034 is for treatment of HCV
in patients with HCV genotype 1 virus who have not responded to combination
therapy with pegylated interferon and ribavirin, the current standard
of care, thus representing an unmet medical need.

SCH 503034 is an orally active inhibitor of the hepatitis C virus serine
protease that inhibits HCV replication. This mechanism is distinct from
those of current therapies, thus SCH 503034 represents a novel class of
HCV inhibitor.

Fast Track designation allows FDA to expedite review of drugs and biologics
for serious or life-threatening conditions and which demonstrate the potential
to address unmet medical needs. An important feature of Fast Track designation
is that it emphasizes the critical nature of close, early communication
between the FDA and the sponsor company to improve the efficiency of product
development.

Status of SCH 503034 Clinical Development

SCH 503034 has demonstrated potent antiviral activity and was well- tolerated,
both as monotherapy(1) and in combination with PEG-INTRON® (peginterferon
alfa-2b),(2) in Phase I clinical studies in patients chronically infected
with HCV genotype 1 who were nonresponders to previous therapy, including
peginterferon and ribavirin combination therapy. Results of Phase I clinical
studies with SCH 503034, including in healthy subjects,(3) were presented
at the 56th Annual Meeting of the American Association for the Study of
Liver Diseases (AASLD) in November 2005. HCV genotype 1 is the most common
form of the virus worldwide and is considered the most difficult to treat
successfully.

Phase II Study Ongoing

Based on the results of the Phase I clinical program and extensive preclinical
safety and pharmacology studies, Schering-Plough is conducting a large,
randomized Phase II dose-finding study involving 300 patients worldwide.
This study evaluates the safety and efficacy of SCH 503034 in combination
with PEG-INTRON, with and without added ribavirin, for 24 or 48 weeks
in patients with chronic HCV genotype 1 who were nonresponders to previous
peginterferon and ribavirin combination therapy. The primary objective
of this study is to determine the safe and effective dose range of SCH
503034 in combination with PEG-INTRON in this patient population. A secondary
objective is to explore whether or not ribavirin provides an additional
benefit when combined with SCH 503034 plus PEG-INTRON.

Additionally, an extensive preclinical and Phase I clinical development
program is ongoing to support the potential broad utility of SCH 503034
in treating chronic hepatitis C.

About PEG-INTRON

PEG-INTRON is approved in the United States as monotherapy and for use
in combination therapy with REBETOL® (ribavirin, USP) for the treatment
of chronic hepatitis C in patients with compensated liver disease who
are at least 18 years of age, and is not approved for treatment of patients
who are nonresponders to previous therapy.

Important Safety Information Regarding U.S. Labeling for PEG-INTRON and
REBETOL

WARNING

Alpha interferons, including PEG-INTRON, cause or aggravate fatal or
life- threatening neuropsychiatric, autoimmune, ischemic, and infectious
disorders. Patients should be monitored closely with periodic clinical
and laboratory evaluations. Patients with persistently severe or worsening
signs or symptoms of these conditions should be withdrawn from therapy.
In many but not all cases these disorders resolve after stopping PEG-INTRON
therapy.

Ribavirin causes hemolytic anemia. Anemia associated with REBETOL therapy
may exacerbate cardiac disease that has led to fatal and nonfatal myocardial
infarctions. Patients with a history of significant or unstable cardiac
disease should not be treated with REBETOL. It is advised that complete
blood counts (CBC) be obtained at baseline and at weeks 2 and 4 of therapy
or more frequently if clinically indicated.

REBETOL and combination REBETOL/PEG-INTRON therapy must not be used by
women, or male partners of women, who are or may become pregnant during
therapy and during the 6 months after stopping therapy. REBETOL and combination
REBETOL/PEG-INTRON therapy should not be initiated until a report of a
negative pregnancy test has been obtained immediately prior to initiation
of therapy. Women of childbearing potential and men must use effective
contraception (at least two reliable forms) during treatment and during
the 6- month post-treatment follow-up period. Significant teratogenic
and/or embryocidal effects have been demonstrated for ribavirin in all
animal species in which adequate studies have been conducted. These effects
occurred at doses as low as one twentieth of the recommended human dose
of REBETOL. If pregnancy occurs in a patient or partner of a patient during
treatment or during the 6 months after treatment stops, physicians are
encouraged to report such cases by calling (800) 727-7064.

PEG-INTRON

There are no new adverse events specific to PEG-INTRON as compared to
INTRON® A (interferon alfa-2b, recombinant) for Injection, however,
the incidence of some (e.g., injection site reactions, fever, rigors,
nausea) were higher. The most common adverse events associated with PEG-INTRON
were "flu-like" symptoms, occurring in approximately 50% of
patients, which may decrease in severity as treatment continues. Application
site disorders were common (47%), but all were mild (44%) or moderate
(4%) and no patient discontinued, and included injection site inflammation
and reaction (i.e., bruise, itchiness, irritation). Injection site pain
was reported in 2% of patients receiving PEG-INTRON. Alopecia (thinning
of the hair) is also often associated with alpha interferons including
PEG-INTRON.

Psychiatric adverse events, which include insomnia, were common (57%)
with PEG-INTRON, but similar to INTRON A (58%). Depression was most common
at 29%. Suicidal behavior including ideation, suicidal attempts, and completed
suicides occurred in 1% of patients during or shortly after completing
treatment with PEG-INTRON.

The following serious or clinically significant adverse events have been
reported at a frequency less than or equal to 1% with PEG-INTRON or interferon
alpha: Severe decreases in neutrophil or platelet counts, hypothyroidism,
hyperglycemia, hypotension, arrhythmia, ulcerative and hemorrhagic colitis,
development or exacerbation of autoimmune disorders including thyroiditis,
RA, systemic lupus erythematosus, psoriasis, pulmonary disorders (dyspnea,
pulmonary infiltrates, pneumonitis and pneumonia, some resulting in patient
deaths), urticaria, angioedema, bronchoconstriction, anaphylaxis, retinal
hemorrhages, and cotton wool spots.

In the PEG-INTRON/REBETOL combination trial the incidence of serious
adverse events was 17% in the PEG-INTRON/REBETOL groups compared to 14%
in the INTRON A/REBETOL group. The incidence of severe adverse events
in the PEG- INTRON/REBETOL combination therapy trial was 23% in the INTRON
A/REBETOL group and 31-34% in the PEG- INTRON/REBETOL groups. Dose reductions
due to adverse reactions occurred in 42% of patients receiving PEG-INTRON
(1.5 mcg/kg)/ REBETOL and in 34% of those receiving INTRON A/REBETOL.

REBETOL should not be used in patients with creatinine clearance less
than 50 mL/min.

Schering-Plough Corporation is a global science-based health care company
with leading prescription, consumer and animal health products. Through
internal research and collaborations with partners, Schering-Plough discovers,
develops, manufactures and markets advanced drug therapies to meet important
medical needs. Schering-Plough's vision is to earn the trust of the physicians,
patients and customers served by its more than 30,000 people around the
world. The company is based in Kenilworth, N.J., USA, and its Web site
is http://www.schering-plough.com.